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Cyprus "Uncharted Territory" Sets Sell-Side Scrambling

Tyler Durden's picture




 

While offering up some 'hope' that the unprecedented tax on Cypriot deposits will not spark "massive" contagion (due to the ECB's "promise"), it appears from this summary of sell-side opinion on this weekend's European developments that the sell-side is starting to panic... it would appear the European credit markets, that have been so skittish in recent weeks (especially the financials), had it right all along? whocouldanode? It seems, as the head of the European Parliament's Economic and Monetary Affairs Committee, no less, said: "The lesson here is that the EU's single-market rules will be flouted when the Eurozone, ECB, and IMF say so."

Via Bloomberg,

Holger Schmieding, chief economist at Berenberg Bank:

  • Optimistic this will not spark “massive” contagion thanks to ECB promise that it will do all it takes to keep reform countries in the euro
  • The risk that this “could backfire is not zero”
  • We are in “unchartered territory again”

Charles Diebel, head of market strategy at Lloyds Banking Group Plc:

  • Given that the agreement was announced after banks in Cyprus had closed for the weekend the chance of capital flight is “unlikely” as it’s already too late
  • The tax will “increase nervousness” and pressure peripherals at least in the short term
  • Could pressure the euro

Alberto Gallo, head of European macro credit research at Royal Bank of Scotland Group Plc:

  • Cyprus a special case with bank assets of EU125b over 7x the size of the economy
  • Unique also as Cypriot banks have only EU2b of bonds outstanding, making bondholder bail-in ineffective
  • Possible that some small periphery banks may suffer deposit outflow to larger firms

Annalisa Piazza, a fixed-income analyst at Newedge Group:

  • This will spread “some panic” across the euro area periphery which could result in capital outflows
  • Will have impact on concern that similar measures could be applied elsewhere
  • Some weakening of the euro cannot be ruled out

 

 

And from an 'insider' - Sharon Bowles, head of the European Parliament’s Economic and Monetary Affairs Committee, said:

  • Levy on deposits agreed under Cyprus bailout deal means circumventing EU deposit guarantee laws
  • “It robs smaller investors of the protection they were promised,”
  • The lesson here is that the EU’s single market rules will be flouted when the Eurozone, ECB and IMF say so,”
 

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Sat, 03/16/2013 - 14:09 | 3335563 DoChenRollingBearing
DoChenRollingBearing's picture

My BAC ATM card just worked OK, $500 OUT of the bank.

Prepare, starting yesterday!

Sat, 03/16/2013 - 14:17 | 3335581 IridiumRebel
IridiumRebel's picture

Awesome! I strongly urge you to move your money away from BAC.

Sat, 03/16/2013 - 14:33 | 3335642 DoChenRollingBearing
DoChenRollingBearing's picture

Good advice!  I have my assets scattered around, don't worry about me.  Look out for you and yours.  AmmOK from the southern front!

Sat, 03/16/2013 - 14:41 | 3335664 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

bitcoin holders not affected

Sat, 03/16/2013 - 15:57 | 3335854 enloe creek
enloe creek's picture

screw bitcoin, it is not a currency! you can't convert it or obtain it, it is a joke

 

Sat, 03/16/2013 - 16:09 | 3335896 Stackers
Stackers's picture

Everyone have their towels ?

Sun, 03/17/2013 - 06:38 | 3337460 Element
Element's picture

DON'T PANIC!!

Sat, 03/16/2013 - 16:57 | 3336060 jeebus
jeebus's picture

Wrong on all accounts. I've been getting bitcoins since they were $15. Fiat money is not a currency. You can easily keep 80% of your money in bitcoin if you are so inclined, and many people are. If you wanted bitcoins you could have them in a few days at the very most if you just use conventional methods.

Sun, 03/17/2013 - 11:27 | 3338199 sbfeibish
sbfeibish's picture

I think Peter Schiff does_business/keeps_money_with with BAC because they're "too big to fail" (TBTF)

Sat, 03/16/2013 - 14:17 | 3335586 JamesBond
JamesBond's picture

But you started with $535...

 

 

Sat, 03/16/2013 - 14:22 | 3335608 Ancona
Ancona's picture

So this is how it starts....

Gold, guns, beans and bullets. I'm just 'sayin....

Sat, 03/16/2013 - 15:04 | 3335644 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

Yes, yes, yes, and yes.  Heard ya!

EDIT:

Or you can just buy bearings...  "Customers and Bearings"

http://tinyurl.com/bzh6scb

Sat, 03/16/2013 - 14:36 | 3335649 Winston Churchill
Winston Churchill's picture

Just ordered some more beans myself,next stop some more shiny.

Just wish they could have waited a couple of months as I'm still liquidating some assets

here, and there, plus hanging on for my last royalty check in pounds.

Sun, 03/17/2013 - 01:04 | 3337295 Lore
Lore's picture

Millions of preppers all eating beans at once?  Maybe we'll get a chance to see if Al Gore was right after all.

Sat, 03/16/2013 - 17:46 | 3335714 grid-b-gone
grid-b-gone's picture

I started moving out of the bailout banks in 2008 and today own everything 100% except a piece of rural land. Now 4% debt-to-net worth - easily paid off, even during a crisis.

Many on ZH and other blogs think they will pay off debt with inflated dollars. Inflation targets are to help banks, not individuals. The Cyprus action is clear evidence that no anti-individual idea is being rejected. The middle class is now thought of as a commodity - feeder fish easily mistaken as equals swimming among the focal species.

The individual can easily win. Own outright everything you want to keep. Debt puts someone else before you when the ownership of your assets comes into question. 

 

Sat, 03/16/2013 - 18:14 | 3336292 nightshiftsucks
nightshiftsucks's picture

If they tried to do that here the whole govt would be recalled.

Sun, 03/17/2013 - 01:08 | 3337299 Lore
Sat, 03/16/2013 - 21:09 | 3336800 honestann
honestann's picture

Only if you own things they can't tax.  Nothing stops the predators from raising property taxes from 1% to 3%, or 3% to 9%, or 9% to 27%, etc.  Nothing stops the state and federales from adding their own property taxes too.

The only thing that is safe is real, physical assets that they cannot see or find.  And if these are real, physical productive assets (meaning assets that help you produce additional physical goods), then you are way ahead.

Probably the best investment is to pick up stakes and move to some backwater nation where the government is just a bunch of clueless keystone cops, and more-or-less limited to screwing around in their capital-city or major cities.

The fact is, one should never live in a place where they are considered "a citizen", because "citizen == slave" in the eyes of every pack of predators-DBA-government.  However, in a majority of countries, non-citizens are generally considered to be, and generally treated as "welcome guests" who spend outside money into their economy.

The point is, move to where you are not considered a citizen.  That's often the single best investment a human being can make.

Sun, 03/17/2013 - 00:56 | 3337286 Taffy Lewis
Taffy Lewis's picture

Right on, honestann.

What you say supports my move in the near future to a SE Asian "backwater country".

I'll rent my house out here in the Midwest US and comfortably pay the mortgage, insurance, etc. and it will be a safety valve if my SE Asia plan falls through.

Sat, 03/16/2013 - 15:11 | 3335736 tip e. canoe
tip e. canoe's picture

clif's recipe for black bean soup

http://halfpasthuman.com/blackbeansoup.html

cook, eat, and be well, testing time rushes ever closer.

Sun, 03/17/2013 - 02:21 | 3337351 WTFRLY
WTFRLY's picture

How could anyone down-vote that?

Sat, 03/16/2013 - 14:24 | 3335612 hugovanderbubble
hugovanderbubble's picture

Time to Get Long Exposure to Rare Earth Metals Companies (physically) for next cycle -2014-2022 and sell Real Estate REITS

Sat, 03/16/2013 - 14:38 | 3335657 DoChenRollingBearing
DoChenRollingBearing's picture

I follow the rare earth sector.  You may very well be right.  Too many small players ups the risk right now though, IMHO as I am no expert.

Sat, 03/16/2013 - 16:13 | 3335904 Larry Dallas
Larry Dallas's picture

It's all happening so fast but seems like slow motion. Like a car wreck.

Next, someone with a 3" blade will (hijack a commercial jetliner as planned and attempt to fly it into Las Vegas, White House, etc.) because they are now "allowed to" and we will be a full police state.

What will the sheeple who live paycheck to paycheck do who eat fast food?

Emergency Essentials order being placed tonight. Shit is getting real.

 

Sat, 03/16/2013 - 17:38 | 3336188 negative rates
negative rates's picture

Just like waves,...crashing on the beach.

Sat, 03/16/2013 - 20:11 | 3336645 Lets Buy The Dip
Lets Buy The Dip's picture

yes, everyone keeps on going on about how good the market is right now. But maybe this is the catalyst they need!!

Also has anyone seen what happened on OPEX friday. I know I must not be the only one seeing what happened on the nasdaq daily charts, and other have been blogging about it. 

nasdaq daily volume - nasdaq daily chart and daily volume warning

have a look at that chart above, you can see that something dynamic is happening to the market. The smart money was not only selling on friday, they were like lemmings hopping out as the selling volume was higher than average and it is telling me the smart money were getting out in front of some bigger news. They always know what is coming before us little lemming traders. 

So even though we are reading this bad news over the weekend, the charts, and the news are all adding up to something...well.....not so good. 

Also the market breadth is still overbought, so we are getting like a tripple confirmation that the market is about to sell off. All it needs now is some bad news, which we are getting, and it could be GOODNIGHT IRENE if you know what I mean. 

Now that opex is over, it could spell trouble for the market, and they love to bring in bad news just after opex. Fancy that. IT all seems to be mysteriously adding up. 

Sat, 03/16/2013 - 14:10 | 3335565 falak pema
falak pema's picture

Markets can panic but they have nowhere to go; running to USd/WS is not a solution either.

Its now and nowhere...

Sat, 03/16/2013 - 14:18 | 3335590 THX 1178
THX 1178's picture

If the bank run spreads, central banks will have to inject these banks with cash, inflating the currency. If it inflates too much, it will cause a flight from the currency into real goods (even if it means going to the store and dumping dollars to buy beans & rice.) PMs are a real good-- jacking the price up. People who have silver contracts will ask for the real stuff, exposing the bankrupt and manipulated custodians. This is how currencies die.

Sat, 03/16/2013 - 14:25 | 3335620 francis_sawyer
francis_sawyer's picture

Has anybody told Obama yet that his $2 Nassau just went to $20?

Sat, 03/16/2013 - 14:19 | 3335594 centerline
centerline's picture

A good deal of the capital out there doesn't realize it is on borrowed time - and doesn't have a choice anyhow.  It will slosh around seeking safe haven.  Big cash needs deep markets.  More like a hot potato game it seems.

Sat, 03/16/2013 - 15:48 | 3335826 swissaustrian
swissaustrian's picture

I can't imagine that they (Eurocrats, IMF, ECB) are that stupid not to know that this is going to scare depositors all over the peripheral countries. So the question is:

Why do they want another massive capital flight to the core?

Sat, 03/16/2013 - 16:23 | 3335956 debtor of last ...
debtor of last resort's picture

Maybe they try to force a European deposit guarantee for all euro countries together.

Sat, 03/16/2013 - 17:01 | 3336079 reload
reload's picture

Fiscal union  back on deck--thats the game plan here.

Sat, 03/16/2013 - 17:51 | 3336227 RazvanM
RazvanM's picture

1. Testing reactions in a smaller country.

2. Playing the "plunge the market then raise it again" game for the well connected insiders.

PS. I have a feeling that the 10% haircut on the deposits over 100k euros was negociated with the Russians. It's like a fee for cleaning Mafia money. So:

3. The event will be forgotten in a couple of weeks - if the Cipriots are nice and easy.

Just my 2 euro-cents.

Sat, 03/16/2013 - 22:21 | 3337012 rehypothecator
rehypothecator's picture

Isn't it just the most remarkable coincidence that the haircut was decided RIGHT AFTER QUAD WITCHING DAY?!  I mean, what are the odds of that?  All those options that JUST HAPPENED to expire yesterday.  

Sat, 03/16/2013 - 14:21 | 3335576 hugovanderbubble
hugovanderbubble's picture

Thebankrun effect has just begun...(in days this will happen in Italy,then Spain and Portugal,Turkey,Hungary,Romania, Albania,Serbia) and in few months in Belgium ,France...

Welcome to III WW

 

Fiduciary System = Crashed.

 

Wonder what the SNB will do tomorrow...MORE PEG at 1.20 when the real demand is 1.00 or 0.90 EUR/CHF?

Keep manipulating Central Banks- Everyone is in gameover mode. 

CDS market and Covered Bonds will explode = INSTITUTIONAL and COUNTERPARTY and LEGAL RISK ON MODE

Sat, 03/16/2013 - 15:49 | 3335833 swissaustrian
swissaustrian's picture

EUR/CHF has been plunging since 11 am GMT on Friday all day long. Somebody knew in advance. It's not going to take long until we're back at 1.20

Sat, 03/16/2013 - 14:16 | 3335577 IridiumRebel
IridiumRebel's picture

ABORT! ABORT! ABORT!

Sat, 03/16/2013 - 15:25 | 3335766 Cdad
Cdad's picture

Too late.  The announcement of this disasterous decision was all that was needed.  Now everybody has a good clean look at their Eurozone/banker masters. 

Isn't Central Planning fun?

Sat, 03/16/2013 - 20:07 | 3336634 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Challenger, go with throttle up

Sat, 03/16/2013 - 14:17 | 3335579 mickeyman
mickeyman's picture

For the first time I feel lucky that I have nothing to put in the bank.

Sat, 03/16/2013 - 14:17 | 3335585 magpie
magpie's picture

No big deal.

They only negated their own banking union scheme with deposit insurance. Move along.

Sat, 03/16/2013 - 22:09 | 3336968 Matt
Matt's picture

Deposit Insurance: If the bank's deposits are less than 10 percent of liabilities, we confinscate 10% of all deposits.

Sat, 03/16/2013 - 14:18 | 3335592 hugovanderbubble
hugovanderbubble's picture

SHIBOR will skyrocket

CHINA is in serious troubles

Sat, 03/16/2013 - 14:19 | 3335595 NoDebt
NoDebt's picture

And now the ECB "backstop" gets a reality check, I think.

Sat, 03/16/2013 - 14:19 | 3335598 SillySalesmanQu...
SillySalesmanQuestion's picture

The ball is rolling and everyone is fair game...watch your back jack.The banks and goverments interests will trump yours every time...

 

Sat, 03/16/2013 - 14:25 | 3335618 centerline
centerline's picture

Exactly.

Sat, 03/16/2013 - 14:22 | 3335602 lotusblue
lotusblue's picture

Suise franc

Sat, 03/16/2013 - 15:52 | 3335837 swissaustrian
swissaustrian's picture

Limited downside in the short term due to the floor at 1.20 vs EUR.

It's gonna take a lot of pressure before the SNB folds and let's the CHF go up.

Short EUR/USD is probably going to be more profitable in the short term.

Sat, 03/16/2013 - 14:21 | 3335603 hugovanderbubble
hugovanderbubble's picture

Short Draghi, Long Zerohedge

Sat, 03/16/2013 - 14:22 | 3335610 youngman
youngman's picture

What I think is bigger is that some EU banker just pissed off some very bad Russian dudes...and they do not like to get screwed....and they get even....

Sat, 03/16/2013 - 14:24 | 3335614 IridiumRebel
IridiumRebel's picture

I was thinking that too. If there is anyone you do not want to piss of it is the russian mob.

Sat, 03/16/2013 - 14:26 | 3335622 yabs
yabs's picture

I agree youngman

its things like this that could trigger war

 

Russians like the Chinese do not like to loose money

 

seemingly small things like this could be the spark we are allwaiting for that launches ww3

Sat, 03/16/2013 - 14:37 | 3335651 Snoopy the Economist
Snoopy the Economist's picture

I'm sure teh banksters are smart enough to realize that - they subtracted selectively from accounts

Sun, 03/17/2013 - 01:14 | 3337305 Lore
Lore's picture

Comment removed.

Sat, 03/16/2013 - 17:48 | 3336220 Its Only Rock N Roll
Its Only Rock N Roll's picture

What the Euro bankers have done is piss off the Russian Billionaires Club.  These guys and their friends own the main natural gas line to Europe, Gazprom.  They will not be too pleased with someone stealing 10% of their loot in the banks in Cyprus.  Wouldn't be suprised to see the spigot get turned down in short order to most of Europe.  Indeed a very stupid move by the bankers.

Sat, 03/16/2013 - 22:12 | 3336979 Matt
Matt's picture

1. Putin tries to get oligarchs to repatriate their money from Cyprus; they resist.

2. Eurozone powers that be take 10 percent of the money from Oligarch accounts in Cyprus, give assurances that it was a "one time thing" and also will not happen in other Eurozone countries.

3. Oligarchs pull their money back into Russian banks, just as Putin wanted all along.

or alternative 3. Oligarchs put their money somewhere else that is not in Euros; England, Switzerland, America, Singapore?

Sat, 03/16/2013 - 14:23 | 3335611 OutLookingIn
OutLookingIn's picture

"capital flight unlikely..."

"skittish markets..."

"small periphery banks may suffer..."

"will spread some 'panic' in the Euro area..."

Wow! The taliking heads are being marched out to 'talk' down the situation. Everything normal, no need to panic, business as usual, just a one time thing, etc. etc. etc. Meanwhile, back at the ranch...

Sat, 03/16/2013 - 15:00 | 3335681 lotusblue
lotusblue's picture

OutLookingIn,

 

Along those lines- This I suspect is a "modeling excercise".Much like in the market flag flying to discover how things will move.Noone saw this coming,"we have an agreement"....

The point here is to see how the various societies react and where the money flows.

Societal reaction to gauge flashpoints and depth of acceptance or lack there of.These will be squeezed more in time.

The Money flows,well that's obvious for further "levies" contributions of stability !

It'll be curious how the MSM approach this as "played down" as to Cyprus being such a tiny part of EU (economically %0.2). Actually,this "levy is breach of EU law.

As for the Russians' "dark money",they're gonna get scalped big time.This game is played 3-5 levels up.Global pieces are in motion now,sit back and enjoy the show!

Sat, 03/16/2013 - 16:19 | 3335939 Cdad
Cdad's picture

Huh...I wonder if Nigel Farage will have something interesting to say about this move?  I await, with great anticipation, a glimpse of his response to this utterly disasterous decision.  Should be fun. 

Sun, 03/17/2013 - 01:17 | 3337309 Lore
Lore's picture

Farage is fun, but that's all.  Watch the audience during one of his rants. Do they strike you as caring people?

Sat, 03/16/2013 - 22:10 | 3336970 Lost Word
Lost Word's picture

Meanwhile, back at the Titanic ...

Sat, 03/16/2013 - 14:24 | 3335617 sangell
sangell's picture

Maybe its time to make a sequel to "Its a Wonderful Life" with Ollie Rehn as George Bailey explaining to depositors where their money is.

 

You're thinking of this place all wrong. As if I had the money back in a safe. The money's not here. Your money's gone... Its in Lloyd Blankfein's house, and Jamie Dimon's house, and a hundred other banksters homes. Why, you're lending them the money to build, and then, they're going not going to pay it back to you...ever! 

Sat, 03/16/2013 - 15:25 | 3335771 mikla
mikla's picture

Sat, 03/16/2013 - 17:31 | 3336168 css1971
css1971's picture

That film is propaganda.

Sat, 03/16/2013 - 20:41 | 3336718 earleflorida
earleflorida's picture

propaganda = the misnomer mean(ing) for analytical statistics

Sat, 03/16/2013 - 14:29 | 3335621 john_connor
john_connor's picture

I wonder how a C of I account at treasury direct would fare.  A lot politically connected money in there for those accounts to be given haircuts?

Sat, 03/16/2013 - 14:29 | 3335626 e m m
e m m's picture

Don't get too excited about a weakening euro. It will be great as funding currency for the Dow.

Sat, 03/16/2013 - 14:29 | 3335632 machineh
machineh's picture

MOAR FREE MONEY!

Bernanke is running the presses three shifts, all weekend.

FRNs out the wazoo ...

Sat, 03/16/2013 - 14:36 | 3335648 kieran1968
kieran1968's picture

If you take 10% of my cash on Tuesday, I will take the 90% left on Wednesday. Quid pro quo.

Sat, 03/16/2013 - 14:53 | 3335695 smlbizman
smlbizman's picture

people hate to sell at a loss......

Sat, 03/16/2013 - 22:17 | 3336996 Matt
Matt's picture

There is no loss. The depositors now have a premium stake in their own bank, with shares (hopefully) equivalent to the "Levy" charged. Who knows, maybe they even get preferred shares and start getting some distributions? Anyways, those stocks are just as good as cash, and in some ways, better! They should be thankful for the opportunity.

Sun, 03/17/2013 - 01:31 | 3337320 awakening
awakening's picture

Nah its worse, unlike a cash withdrawel I would be taxed were I to try and sell those shares to reclaim my money (well what little I can get as everyone else does the same thing, they can keep their lowsy "stawks" tyvm). Of course; by the point that even this were on the cards I'd have taken what I had on hand to the nearest trusted PM shop (or private seller to even make that paper trail more difficult to follow).

Sat, 03/16/2013 - 20:46 | 3336735 AgentScruffy
AgentScruffy's picture

That's the only thing we have working in our favor against idiot bureaucrats--the fact that they are idiots.

Sat, 03/16/2013 - 22:13 | 3336982 Lost Word
Lost Word's picture

They will not let you take the 90% out.

Sat, 03/16/2013 - 22:28 | 3337022 Joebloinvestor
Joebloinvestor's picture

From what I read, they will allow one to withdraw whatever is left and you get shares for the % siezed.

There are gonna be runs on banks on monday.

Sat, 03/16/2013 - 14:42 | 3335669 Dareconomics
Dareconomics's picture

Cyprus will not achieve a 100% debt to GDP ratio by 2020.  The troika is assuming a 3% growth rate with a perfectly balanced budget for the next 7 years.  Show me one crisis country that has been able to muster 3% growth with no budget deficit. 

http://dareconomics.wordpress.com/2013/03/16/cypriot-debt-will-not-be-su...

Sat, 03/16/2013 - 14:45 | 3335675 OutLookingIn
OutLookingIn's picture

Aaaand....  It's gone.

Sat, 03/16/2013 - 14:54 | 3335698 Miss Expectations
Miss Expectations's picture

Clearly someone attended the Jon Corzine money management seminar "Just F*ckin Take It" in Cyprus last month.

Is there an old Corzine Cyprus connection?

Governor Corzine forms a Hellenic Commission in NJ 2009-06-18 17:31:09

Savas Tsivicos, former President of Cyprus Federation of America and also a member in a committee various ethnicities formed in the past by Governor Jim Florio, said it is an historic day for the State of Jew Jersey.

“Especially for the Greek American Community it is the conclusion of an effort that started a couple of years ago and ended became reality tonight, with the signing by Governor Corzine of the executive order creating the Commission. Now it is up to us, the members of the commission, to take it to the next level and really serve the Greek American Community in the best possible way.

The Greek American Community has been playing a very important role in the affaires of the State of New Jersey and now with the formal establishment of this commission we can bring the community closer with the state government but also work like a bridge between the State of New Jersey and Greece and Cyprus.

http://news.pseka.net/index.php?module=article&id=10243

 

Sun, 03/17/2013 - 01:32 | 3337221 Theta_Burn
Theta_Burn's picture

Savas Tsivicos....thats funny

 

As for Mr. Tsivicos, he was a pc. of shit that never paid his bills.....

Sat, 03/16/2013 - 15:18 | 3335752 yabs
yabs's picture

You know what i am even thinking that when the SHTF and people loose every7thing die to no gold

its karma really

Everyone of my so called friends here in the UK has no clue what I am talking about when I tell them we eirther stop the BOE printing money or face 10 pound loafs of bread.

 

They all think bank bailouts are good as we need the banks and m oney makes the world go around

 

one friend even said its ok as he does not eat much bread

 

I mean how brainwashed are we?

 

It amkes me sick really

Sat, 03/16/2013 - 15:59 | 3335857 Quantitative_Ap...
Quantitative_Appeasing's picture

Yabs,

 

You may want to stop pointing that out to your "friends".  WHEN it happens all those people who get screwed are going to be angry, and anyone who looks to have weathered the storm (e.g. had foresight and planning) is going to become a target. Remember to make it look like you were just as unprepared as everyone else for what happens.

 

Or put another way :

The first rule of FIAT club is - we do not talk about FIAT club....

 

 

 

 

 

Sat, 03/16/2013 - 15:20 | 3335759 e-recep
e-recep's picture

aaaaaand the SHTF in cyprus.

...coming to a town near you.

Sat, 03/16/2013 - 18:40 | 3336349 theprofromdover
theprofromdover's picture

Are they doing it to break the small banks, and save the TBTF ones?

Sat, 03/16/2013 - 19:14 | 3336435 Totentänzerlied
Totentänzerlied's picture

Tempest is a teapot, as Lord Dimon might say. Wake me when the Cypriots are in the streets rioting, bank branches, police stations, and government buildings are burning or seeing gun battles and bomb attacks, the army is being called in, etc.

And there won't be any panic contagion, not this time. Maybe people pulling a little extra cash in the EU periphery this weekend, that's it. You are seriously overestimating the level of give-a-shit present in the general populace. Outside the financial markets, this is non-news. It's time for the plebs to drink fermented green horse urine to celebrate a largely fictitious Irish folk-hero myth. Reality can wait.

Sat, 03/16/2013 - 19:50 | 3336570 ChacoFunFact
ChacoFunFact's picture

isn't this effectively the same thing as a negative interest rate?  could we expect the velocity of money to speed up as result?  I don't think this is the case, however.  This is more like a one-time bang.  in a negative interest rate environment your money is always diminishing in purchasing power regardless of wether it is in a bank or not.  So you tend to spend it more quickly.

 

 

And what kind of fool would deposit his future earnings in said banking system?

Sat, 03/16/2013 - 20:01 | 3336614 pleseus
pleseus's picture

Sell Euro. Buy gold.

Sat, 03/16/2013 - 22:37 | 3337044 Joebloinvestor
Joebloinvestor's picture

Property siezure!

Sounds like the US Federal government.

Sun, 03/17/2013 - 11:29 | 3338207 sbfeibish
sbfeibish's picture

If I lived in Cyprus I'd withdraw all the money I had in bank accounts.

Sun, 03/17/2013 - 11:29 | 3338208 sbfeibish
sbfeibish's picture

If I lived in Cyprus I'd withdraw all the money I had in bank accounts.

Sun, 03/17/2013 - 16:40 | 3339586 Sandmann
Sandmann's picture

They cannot. Their accounts are frozen. The levy is already programmed into the computers

Sun, 03/17/2013 - 23:00 | 3340884 neutrinoman
neutrinoman's picture

No one with any sense should have had ANY money in a Cypriot bank. It's a money-laundering paradise just waiting to be taken down by the Germans et al.

Do NOT follow this link or you will be banned from the site!